This study examines how firms combine research and development (R&D) and capital expenditures (CAPEX) to influence market value, profitability and competitive position. It asks whether firm outcomes depend not only on investment levels, but also on how intangible and tangible investments operate jointly.
The study uses longitudinal panel data from 4,751 global R&D-leading firms over 2005–2024. It estimates firm fixed-effects models with lagged independent variables. The models are structured by hypothesis to examine the separate and joint effects of R&D intensity and CAPEX intensity on market value, profitability and competitive position. Additional analyses assess robustness across alternative specifications.
The results show a differentiated pattern across outcome domains. R&D intensity is positively associated with subsequent market value and profitability. CAPEX intensity is positively associated with profitability, but it does not show a significant stand-alone association with market value. The R&D–CAPEX interaction is negative and statistically significant for market value and profitability. By contrast, the interaction is positive and statistically significant for competitive position. Additional analyses indicate that the market-value interaction is comparatively more stable than the profitability and competitive-position interactions.
The study contributes to strategic management research by examining R&D and CAPEX not only as separate investment commitments, but also as interdependent elements of firm performance. By using a resource orchestration lens, it shows that investment magnitude alone does not fully explain firm outcomes; how intangible and tangible investments operate together also matters across valuation, profitability, and competitive-position outcomes.
